Nearly two years after the deadly train derailment in Lac-Mégantic, Que., Canada and the U.S. have developed a harmonized set of tank-car regulations that aim to make transporting crude by rail a safer endeavour

Nearly two years after the deadly train derailment in Lac-Mégantic, Que., Canada and the U.S. have developed a harmonized set of tank-car regulations that aim to make transporting crude by rail a safer endeavour. The challenge now will be building them fast enough to meet demand.

“I know that the safety measures we have outlined today will not be easy and quite frankly they will not be cheap,” Transport Minister Lisa Raitt said Friday in a joint press conference in Washington, D.C. with U.S. Transportation Secretary Anthony Foxx.

“But the financial losses and the costs of cleaning up after events like Lac-Mégantic would, in the long run, be far more burdensome.”

Foxx said the new regulations are a necessary response to the “staggering” increase in the transportation of crude by rail.

“We know that 99.9 per cent of [crude] shipments reach their destination safety,” Foxx said. “The accidents involving crude and ethanol, though, have shown us that 99.9 per cent isn’t enough; we have to strive for perfection.”

The standards announced Friday match the proposal Transport Canada released in mid-March that called for the development of a stronger tank car, dubbed the TC-117. It will include a thicker shell, a thermal jacket to insulate against fire, a full-head shield to protect the ends of the tank car from puncture and better-protected valves. The older cars will be phased out in stages, with the entire fleet replaced or retrofitted within a decade.

By the end of 2015, it’s forecast that there will be 87,500 tank cars in the North American crude-by-rail fleet, according to Thomas Simpson, president of the Railway Supply Institute, which represents North American tank-car manufacturers.

Replacing or retrofitting those will put a lot of pressure on manufacturers, many of which are already adding capacity in preparation for the expected surge in demand.

“They are being aggressive with their timeline,” Simpson said in an interview. “Now that we’ve got some certainty, we will strive to meet their goals.”

Both Canadian National Railway Co. and Canadian Pacific Railway Ltd. applauded the new regulations.

“From our customers to our employees to all the communities within which we operate, the implementation of a safer tank-car standard benefits all,” CP chief executive Hunter Harrison said in a statement.

The new standards also provide certainty to the oil producers who will need to retrofit their fleets, said Greg Stringham, vice-president for markets and oil sands at the Canadian Association of Petroleum Producers.

The CEO of Porter Airlines Inc. came out swinging against Air Canada on Thursday, expressing bafflement about the airline’s opposition to jets at Toronto’s downtown airport and accusing it of trying to defeat Porter’s expansion plans.

“For us, the real key is the harmonization between Canada and the U.S. because these tank cars do go back and forth across the border,” Stringham said.

One aspect of the new regulations that is not widely supported is a U.S. requirement that all trains carrying a large quantity of flammable liquid have an enhanced system of electronically controlled pneumatic brakes. (Canada also plans to update its braking rules but has not yet done so.)

“The rail industry is of the opinion this technology has not proven to provide a meaningful safety benefit,” Hallman said. “CN also has serious concerns about interoperability and the reliability of the technology in Canada’s harsh winter weather.”

Simpson from the Railway Supply Institute also opposed the braking requirement, saying it will cost his industry an additional US$1 billion to implement.